U.S. President Donald Trump signed an executive order on Thursday approving a plan to transport Canadian oil across the border, aiming to revive segments of the defunct Keystone XL pipeline project. South Bow, the Canadian pipeline company initially involved in the canceled Keystone XL venture, is collaborating with U.S.-based Bridger Pipeline for this new initiative.
The proposed project entails potentially reactivating parts of the existing pipeline in Alberta and Saskatchewan. Bridger Pipeline is looking to construct a 1,038-kilometer pipeline that would commence near the U.S.-Canada border in Phillips County, Montana, and extend to Guernsey, Wyoming.
Upon signing the order, White House Staff Secretary Will Scharf briefed the president, highlighting the cross-border nature of the pipeline akin to the previous Keystone XL. Trump, acknowledging the job creation potential, expressed approval, stating, “A lot of jobs, too. A lot of jobs. OK, very good.”
This revived proposal could elevate Canada’s crude exports to the U.S. by over 12%. It introduces a modified route through the U.S. compared to the prior Keystone XL project, which faced cancellation by former President Joe Biden in 2021 following prolonged opposition from Indigenous and environmental groups. However, it aims to utilize sections of the pre-existing pipeline on the Canadian side, where the Keystone XL infrastructure is fully permitted, with approximately 150 kilometers of pipe already laid in Alberta in 2021.
South Bow is exploring the Prairie Connector project, seeking to expand its Canadian assets by leveraging existing infrastructure and permitted corridors to enhance market access for Canadian crude oil. The project remains in its early stages, subject to commercial evaluations, stakeholder engagements, regulatory procedures, and ongoing assessment, as per South Bow spokesperson Solomiya Martoiu.
Established in 2024, South Bow emerged after TC Energy, the former proponent of Keystone XL, divested its oil pipeline business. James Coleman, an energy law expert at the University of Minnesota, noted the project’s persistence due to market dynamics favoring increased oil production in Canada and global oil traffic challenges.
Despite the project’s potential benefits, legal hurdles akin to those faced by Keystone XL are foreseen. The pipeline, if approved, could transport approximately 550,000 barrels of Canadian crude daily to the U.S., reinforcing Canada’s energy ties with its largest market. Regulatory approvals are crucial for advancing the project, with state permits being a key requirement.
In a time of ongoing trade tensions between Canada and the U.S., the presidential permit for this pipeline project coincides with upcoming trade negotiations. Prime Minister Mark Carney previously discussed the Keystone XL revival with Trump during a meeting at the White House last October.
During the construction of the Canadian leg of the Keystone XL pipeline, around 1,000 workers were stationed in Oyen, situated east of Calgary. Initially proposed in 2005, the 1,897-kilometer Keystone XL pipeline was designed to transport 830,000 barrels of crude daily from Hardisty, Alberta, to Nebraska, connecting with the existing Keystone pipeline leading to U.S. Gulf Coast refineries. In 2024, TC Energy’s bid to seek $15 billion US in damages from the U.S. government was unsuccessful, citing unfair treatment.
The proposed pipeline project signifies a potential resurgence of the Keystone XL route, intending to bolster energy trade between Canada and the U.S. amid evolving market conditions and geopolitical dynamics.
